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Belvoir Lettings shares take a tumble as it warns on letting fees ban

It was a different tale for Purplebricks however, which sees the change as an opportunity

for sale signs on a street
Letting agent fees will now be charged to landlords rather than tenants, the Chancellor announced yesterday

Shares in Belvoir Lettings PLC (LON:BLV) tumbled by more than 6% on Thursday morning after it warned that the ban on charging letting fees to tenants would hit its profits.

As part of his Autumn Statement yesterday, Chancellor Philip Hammond said the government was to stop letting agents from charging upfront fees to tenants, and shift the cost on the landlords instead.

“Landlords appoint letting agents and landlords should pay their fees,” Hammond said.

The move is expected to spur competition in the sector and lower the cost of fees, as landlords are able to shop around for the best agent through which to let their property, something which tenants can’t do.

Belvoir told investors that although it’s difficult to work out the exact impact, the total hit to gross profits could be as high as 8%.

It was a different story for Purplebricks Group PLC (LON:PURP), which claimed that its current “modest and highly competitive” fees mean that the ban won’t have any meaningful impact on the business.

The online estate agent reckons the changes will actually make its offering more attractive.

“The proposed changes to tenant fees represent a significant opportunity to further highlight to landlords the value that Purplebricks is already renowned for offering sellers,” said chief executive Michael Bruce.

Shares in Belvoir slipped by 6% to 113p, while Purplebricks added more than 4% to trade at 113.8p.

Quick facts: Belvoir Group PLC

Price: 118.5 GBX

Market: AIM
Market Cap: £41.6 m

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